Wall Street Risk Aversion Heightens Ahead Of Private Jobs Data

4/4/2012 6:30 AM ET

Negative sentiment continues to engulf Wall Street, as indicated by the U.S. index futures pointing to a notably lower open on Wednesday. Earlier in the global trading day, Asian stocks retreated, reacting to negative Wall Street cues. European stocks are also seeing marked weakness, as fiscal concerns weigh down on the markets. The European Central Bank is set to announce its monetary policy decision in a short while from now. The central bank is widely expected to hold rates unchanged and the real focus will be President Mario Draghi's post-meeting press briefing.

A Spanish debt auction held today reflected the fiscal concerns of the markets, as the peripheral nation could raise funds only at the lower end of its targeted range. Two Main Street events due for today have the potential to alter the course of the markets. The ADP's private sector employment report and the results of the Institute for Supply Management's service sector survey will help provide further clarity on the economic outlook and in turn influence sentiment.

As of 6:30 am ET, the Dow futures are down 92 points, the S&P 500 futures are slipping 11.10 points and the Nasdaq 100 futures are declining 19.75 points.

On the economic front, the ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 am ET. The consensus expectations are for an addition of 208,000 jobs by the sector in March following an addition of 170,000 jobs in February.

The Institute for Supply Management is scheduled to release the results of its non-manufacturing survey at 10 am ET. The non-manufacturing index is likely to show a reading of 57 for March, almost flat with the February reading of 57.3.

The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended March 30th at 10:30 am ET.

San Francisco Federal Reserve Bank President John Williams is scheduled to speak to San Francisco Planning and Urban Research business breakfast at 11 am ET.

In corporate news, Roche said it has sent a second letter to shareholders of Illumina (ILMN) urging them to tender their shares in response to its increased offer.

TIBCO Software (TIBX) announced that it has agreed to acquire LogLogic, a scalable log and security management platform. The company did not reveal the financial terms of the deal.

SanDisk (SNDK) lowered its first quarter revenue guidance to about $1.2 billion from $1.30 billion to $1.35 billion, with the company attributing the weakness to weaker than expected pricing and demand. The company also lowered its total gross margin guidance.

Hovnanian Enterprises (HOV) announced the commencement of a registered underwritten public offering of 25 million of its Class A shares.

Schulman (SHLM), AngioDynamics (ANGO), Bed Bath & Beyond (BBBY) and Ruby Tuesday (RT) are among the companies due to release their quarterly results after the markets close.

The major Asian markets closed lower, dragged lower by the negative lead from Wall Street overnight. Meanwhile, the Chinese, Hong Kong and Taiwanese markets remained closed for public holidays.

Japan's Nikkei 225 average fell 230.40 points or 2.29 percent at 9,820, the lowest closing level since March 8th. Most sectors, barring very few defensive stocks, declined. Australia's All Ordinaries languished below the unchanged line throughout the session, although it pared its losses over the course of trading in the afternoon. The index closed down 5.50 points or 0.12 percent at 4,419. Energy and material stocks retreated strongly, while financial and healthcare stocks provided some offsetting impact.

The Australian Bureau of Statistics reported today that the nation's trade balance showed a deficit of A$480 million on a seasonally adjusted basis in February compared to expectations for a surplus of A$1.1 billion.

European stocks are trading notably lower ahead of the monetary policy decision of the European Central Bank. The French CAC 40 Index and the German DAX Index are receding 1.34 percent and 1.78 percent, respectively, while the U.K.'s FTSE 100 Index is declining 1.18 percent.

International Power (IPR) spurned a $9.5 billion take over bid by GDF Suez, which is seeking to buy the 30 percent stake it does not already own in International Power.

Revised report released by Eurostat showed that the region's private sector contracted by less than initially estimated in March. The composite output index fell to 49.1 from 49.3 in February, although it was higher than the flash estimate of 48.7. The service sector index rose 0.4 points to 49.2. Meanwhile, a separate Markit survey showed that the U.K.'s service sector activity grew at a faster rate in March.

Eurozone's retail sales edged down 0.1 percent month-over-month in February but the drop was in line with estimates. On an annual basis, the decline was 2.1 percent, steeper than the 1.1 percent drop expected by economists.

Risk currencies are taking a beating and commodity prices are also seeing marked weakness.